CLIMAX WEEK BEGINS – Democratic staffers worked feverishly through the weekend drafting a reconciliation bill that insiders said was still unfinished Sunday night. The House Budget Committee posted the shell bill on its Web site late last night that will be amended to include the package of fixes. The markup is scheduled to begin at 3 p.m. today. White House officials took to the Sunday morning shows to declare that health care reform will pass. And while House Democratic Whip James Clyburn shared their sunny predication, he cautioned that he has still not gathered the 216 votes needed to pass reform. The weekend included high drama for the drug industry as lobbyists huddled with Democratic staffers to work out a fee structure and donut-hole fix that wouldn’t bust the $90-billion commitment they made to pay for reform, industry sources said. Drug makers were asked to sign off on multiple solutions so that backup options were available should any of the fixes run into problems passing muster with the Senate parliamentarian. The industry also decided to drop its push to be carved out from an independent Medicare payment advisory board – vowing instead to fight it if it becomes law, sources said. There was “real heartburn with the bill over the weekend and over the last week,” an industry source said. But insiders expressed confidence that their issues were on the road to resolution.

THE AMERICAN SPECTATOR's Philip Klein: “Shortly before midnight on Sunday, Democrats released a 2,309 page health care bill that will start the process of reconciliation -- but don't let that fool you, it's not the actual reconciliation bill with all the changes you've been reading about. Instead, as Rep. Paul Ryan, the ranking Republican member on the Budget Committee, explained to me last week, this is just the ‘shell’ bill -- the vehicle that Democrats need to get moving on health care. Once the bill gets approved (likely Monday), Democrats will send this phantom bill over to the Rules Committee, where it will be stripped, and then they'll insert in all of the actual changes that they've negotiated.”

THE HILL's Michael O’Brien: “ The Budget committee released a 2,309-page effort that had been previously recommended to the Education and Labor Committee and Ways and Means Committee last year. The measure posted online does not include the substantive changes to the Senate healthcare bill that House Democrats will seek. Those changes will be offered during the markups in the Budget and Rules committees, which the budget panel hopes to begin on Monday afternoon.”

WaPo's Ezra Klein: “The bill on the House Budget Committee's web site that's being called the reconciliation bill is not the reconciliation bill, or at least not what people mean when they talk about the reconciliation bill. It's the bill that will become the reconciliation bill. You see this occasionally in the House and Senate, where the oddities of the rules occasionally make it useful to put a new bill in the hollowed-out shell of an old bill.”

HOMESTRETCH SCRAMBLE – POLITICO’s Patrick O’Connor reports: “After nearly a year of haggling, most of House Speaker Nancy Pelosi’s 252 Democratic colleagues still have concerns about passing the Senate bill, even with some fixes. Their objections range from the ideological to the procedural, and the shape of the final package hinges on an obscure, unelected official — Senate parliamentarian Alan Frumin. Here are the five largest potential pitfalls: 1) Abortion … 2) Bending the House rules … 3) The parliamentarian … 4) House-Senate distrust … 5) Immigration.”

** Health insurance companies’ costs are a small slice of the health care cost pie - four percent of all spending. Washington needs to look at the whole pie to help make health care affordable. www.AmericanHealthSolution.org **

POTUS TODAY: At 1:05 p.m., President Obama will talk health insurance reform at a senior center in Strongsville, Ohio.

SERIOUS PRESSURE – NYT’s Jeff Zeleny reports: “The yearlong legislative fight over health care is drawing to a frenzied close as a multimillion-dollar wave of advertising that rivals the ferocity of a presidential campaign takes aim at about 40 House Democrats whose votes will help determine the fate of President Obama’s top domestic priority. The coalition of groups opposing the legislation, led by the United States Chamber of Commerce, is singling out 27 Democrats who supported the health care bill last year and 13 who opposed it. The organizations have already spent $11 million this month focusing on these lawmakers, with more spending to come before an expected vote next weekend. An alliance of groups supporting the health care plan, which works closely with the White House and Democratic leaders, had been spending far less and focusing on fewer districts. But after pharmaceutical companies made a $12 million investment for a final advertising push, spending by both sides for the first time is now nearly the same. Not only are these swing Democrats being pummeled in the new spate of advertising — which could total $30 million before week’s end — but extensive efforts are under way in Congressional districts, where groups on both sides of the issue are using tactics similar to get-out-the-vote drives to urge constituents to contact their lawmakers. Mr. Obama is calling lawmakers, too, and on Monday is traveling to Ohio to open a weeklong campaign to close this act of the health care debate.”

MOVEON THREATENS ANTI-REFORM DEMS: MoveOn is sending an email to its members today asking them to pledge to support a progressive primary challenger to House Democrats that vote against reform. MoveOn has shown it can effectively raise money for progressive candidates. In the two weeks since Arkansas Lt. Gov. Bill Halter announced his race against moderate Democratic Sen. Blanche Lincoln, the group raised $1.3 million for Halter. READ THE EMAIL

W.H. BACKS DOWN ON SPECIAL DEALS – AP’s Libby Quaid reports: “Axelrod also indicated the White House was backing down on an attempt to get senators to rid the legislation of a number of lawmakers' special deals. Taking a new position, he said the White House only objects to state-specific arrangements, such as an increase in Medicaid funding for Nebraska, ridiculed as the ‘Cornhusker Kickback.’ That's being cut, but provisions that could affect more than one state are OK, Axelrod said. That means deals sought by senators from Montana and Connecticut would be fine — even though Gibbs last week singled them out as items Obama wanted removed. There was resistance, however, from two powerful committee chairman, Democratic Sens. Max Baucus of Montana and Chris Dodd of Connecticut, and the White House has apparently backed down. ‘The principle that we want to apply is that are these: Are these applicable to all states? Even if they do not qualify now, would they qualify under certain sets of circumstances?’ Axelrod said. That's the argument made by aides to Baucus and Dodd. The measure to give Medicare coverage to asbestos-sickened residents of Libby, Mont., could apply to other places where public health emergencies are declared — even though Libby is the only place where that's happened so far. Dodd's deal would leave it up to the health secretary to decide where to spend $100 million for construction of a hospital, though Dodd has made clear he hopes the University of Connecticut would be the beneficiary.”

THE TIMELINE – WaPo’s Dan Eggen reports: “House Democrats expect to receive a final cost estimate by Monday afternoon, when the House Budget Committee is scheduled to vote on the reconciliation package. It would then go to the House Rules Committee, where Chairman Louise M. Slaughter (D-N.Y.) could package it with the $875 billion measure the Senate passed on Christmas Eve. The package is also expected to include Obama's proposed overhaul of the student-loan system. The full House is expected to vote on both measures by week's end, with the climactic moment coming as soon as Thursday but, more likely, Friday or Saturday, aides said.”

THE KEY BLOCS –WSJ’s Janet Adamy and Greg Hitt take a look: “The House approved its version of the health bill in November with three votes to spare, and that margin has more than evaporated as a handful of lawmakers who voted ‘yes’ then have switched to ‘no or no longer hold their seats. The president will talk to members of Congress one-on-one in meetings and over the phone this week, according to a White House official. The Obama administration and House leaders will spend the coming days in a push to persuade several of last year's no votes to switch to yes, while retaining at least a dozen yes votes who are wavering. No Republicans are expected to vote for the measure. Two blocs of House Democrats are most critical as Speaker Nancy Pelosi seeks 216 votes, a majority in the 431-seat House with four seats vacant. First are moderates who voted against the House bill because they found it too liberal. Some of those members could be won over by the latest version of the legislation, because it's expected to cost less than the $1.05 trillion House bill, goes further to reduce the deficit and doesn't contain government-expanding provisions like a public health-insurance option. Second are the antiabortion Democrats who voted for the House version in part because it prevented anyone who got government-subsidized insurance from enrolling in a plan that covers the procedure. The latest package would allow women with an insurance subsidy to enroll in a plan that covers abortion as long as they wrote a separate check for that portion of the premium.”

NEW REPORT OUT – The Robert Wood Johnson Foundation and the Urban Institute report: “Without significant reform to the current health care system, the number of uninsured Americans could grow by 10 million people in just five years, and spending on government health care programs for the poor could more than double by 2020. … The report projects that by 2015, there could be as many as 59.7 million people uninsured – and further estimates that the number could swell to 67.6 million by 2020. An estimated 49.4 million individuals were without health coverage in 2010.”

SENATE ABORTION LANGUAGE LIKELY – Roll Call’s Steven Dennis and Tory Newmyer report: “House Democratic leaders are growing increasingly confident that they can avoid an impasse on abortion when they vote later this week on health care legislation. That confidence has been buoyed as a trickle of Democrats opposed to abortion rights, such as Rep. Dale Kildee (D-Mich.), have said they are satisfied that the Senate bill’s language effectively prohibits federal funding of abortions, while other Democrats who oppose abortion rights, including Transportation and Infrastructure Chairman James Oberstar (D-Minn.), have left open wiggle room to vote for the Senate bill despite earlier comments to the contrary.”

ABORTION RIDERS – WaPo’s Peter Slevin reports: “In North Dakota, where insurers can cover abortions if customers pay a separate premium, the state's largest provider says it sells no abortion policies because no one has asked to buy one. Amid a high-stakes debate over abortion that could determine the fate of President Obama's health-care initiative, North Dakota's law offers a test because it is much like the language favored by antiabortion lawmakers on Capitol Hill, notably Rep. Bart Stupak (D-Mich.). … Similar policies are in place in Kentucky, Missouri, Idaho and Oklahoma. … In the five states where abortion coverage is prohibited except with a rider, it is unclear how customers who purchase group insurance, typically for their employees, learn about the abortion coverage option.”

IMPLEMENTATION PLANS BEGIN – POLITICO’s Frates reports: “Supporters and opponents of health reform continue to duke it out ahead of next week’s expected final House vote, but both sides are already laying the groundwork to effectively implement reform should it pass. Families USA executive director Ron Pollack has chartered a non-profit group, tentatively named Enroll America, that would create a major, nationwide operation to ensure that people newly eligible for Medicaid and insurance subsidies are able to easily apply and receive those benefits. The plan, of course, is contingent upon reform passing. Pollack said he has reached out to reform supporters like PhRMA and hospitals and opponents such as America’s Health Insurance Plans and Blue Cross Blue Shield and found them all interested in participating.”

DEMS NEED A PUSH – TNR’s Jonathan Cohn writes: “Even as the Chamber of Commerce was announcing its offensive, the Service Employees International Union--arguably the single most effective organization in the pro-reform coalition--was telling wavering Democrats they should expect no support, and possibly a primary challenge, if they vote ‘no.’ As my colleague Jonathan Chait notes, ‘This is the kind of thing the Democrats need more of right now.’ But with the vote count so close, reform may not pass without something else: A push from the outside. It’s not clear if that push will come. Recent polls show a clear change in public opinion: People are demonstrating more approval both of the Democrats and their reform bill. But, as far as I can tell, an enthusiasm gap remains. Conservatives hate the bill. Liberals, well, they’re still learning to like it. … A year-and-a-half ago, that kind of energy got a president elected. It's been gone for a while now. This week would be a good time for it to come back.”

MEET YOUR PARLIAMENTARIAN – NYT’s Sheryl Gay Stolberg has the profile: “As Washington enters the final act of its long-running health care drama, (Alan) Frumin — a nonpartisan civil servant who got his start as a precedents writer for the House — is in a starring role. His rulings on arcane procedural questions may determine whether President Obama winds up signing a health care overhaul or whether the administration’s signature policy initiative collapses. By Friday, Mr. Frumin had become a major preoccupation for Democrats and Republicans, as they tried to divine his views on whether Mr. Obama must sign a health bill into law before Democrats can use the filibuster-proof budgetary tactic known as reconciliation to make changes to it. In the weeks to come, there will be a slew of Republican challenges to reconciliation.”

PULSE OP-ED:

Republican Rep. Paul Ryan in WaPo: “ Today, the House Budget Committee is to mark up a ‘reconciliation’ vehicle, initiating the greatest expansion in government and entitlement spending in a generation through a partisan process to push ‘health-care reform’ across the finish line. Despite claims of transparency and calls for a "simple up-or-down vote," there is nothing simple about this process. This convoluted legislative charade demonstrates how far the Democratic majority has wandered from real health-care reform and cost control, employing any means to achieve political victory.”

NYT editorial: “ We strongly support a woman’s right to choose and are disturbed by the restrictions in both the House and Senate bills on a woman’s ability to buy insurance that covers abortions. But the opportunity to provide coverage for 30 million of the uninsured — and more security for all Americans — is too important to miss. We are puzzled and dismayed that these legislators are willing to waste that opportunity because they say the onerous anti-abortion provisions in the Senate’s bill are still not onerous enough.”

WaPo's Robert Samuelson: “ Covering the uninsured is not the health-care system's major problem. The big problem is uncontrolled spending, which prices people out of the market and burdens government budgets. Obama claims his proposal checks spending. Just the opposite. When people get insurance, they use more health services. Spending rises. By the government's latest forecast, health spending goes from 17 percent of the economy in 2009 to 19 percent in 2019. Health ‘reform’ would probably increase that.

Unless we change the fee-for-service system, costs will remain hard to control because providers are paid more for doing more. Obama might have attempted that by proposing health-care vouchers (limited amounts to be spent on insurance), which would force a restructuring of delivery systems to compete on quality and cost. Doctors, hospitals and drug companies would have to reorganize care. Obama refrained from that fight and instead cast insurance companies as the villains. He's telling people what they want to hear, not what they need to know.”

Heather Higgins and Kellyanne Conway in WSJ: “Voters in key congressional districts are clear in their opposition to what they have seen, read and heard on health-care reform. That's one of the findings of a survey that will be released today by the Polling Company on behalf of Independent Women's Voice. The survey consisted of 1,200 registered voters in 35 districts represented by members who could determine the outcome of the health-care debate. Twenty of those members voted for the House bill in November but now may be reconsidering. Fifteen voted against the bill but are under tremendous pressure to change their vote. The survey shows astonishing intensity and sharp opposition to reform, far more than national polls reflect.”

T.R. Reid in WaPo: “The contention that opponents of abortion should oppose the current proposals to expand coverage simply doesn't make sense. Increasing health-care coverage is one of the most powerful tools for reducing the number of abortions -- a fact proved by years of experience in other industrialized nations. All the other advanced, free-market democracies provide health-care coverage for everybody. And all of them have lower rates of abortion than does the United States.”

(EDITED BY TIM ALBERTA)

** If you look inside the health care cost pie, you’ll find that health insurance companies’ costs are one of the smallest slices - four percent of all health care spending. Doctors, hospitals, medicines and tests are the biggest slices, and a government report says their rising prices are a primary driver of higher health care costs. If Washington wants to make health care more affordable, they need to look at the whole health care pie - not just a small slice. To get the facts about rising health care costs and how they can be contained, visit www.AmericanHealthSolution.org **

** A message from PhRMA: Diabetes is a complex disease affecting more than 30 million Americans – with one-in-ten living in DC, Maryland and Virginia having the disease. Thanks to advances in diabetes care, patients around the country are living longer, healthier lives. Take five-year-old Rhys for example [link to his I’m Not Average profile]. He was diagnosed with type 1 diabetes at 15-months-old, but today, he is a thriving young boy. This is due in large part to new and innovative medicines developed by researchers and scientists at America’s biopharmaceutical companies. Learn more about the medicines in development for diabetes here. **

Authors:

About The Author

Chris Frates began covering politics before he was old enough to vote. Since his early days covering town council meetings run by three guys behind a folding table, Frates has been fortunate enough to cover government on every level.

An original Politico, Frates covers the intersection of money, politics and policy inhabited by Washington’s lobbyists and writes about national politics. During the health care reform debate, Frates wrote for the paper and was the lead writer of Live Pulse, the website’s health care reform blog. Frates also founded and wrote Politico Pulse, the popular, daily health reform e-mail briefing that quickly became Washington’s must-read crib sheet.

Before coming to Washington, Frates spent more than four years at The Denver Post where he wrote about state politics. Frates covered the 2004 Democratic takeover of the Colorado statehouse, a forerunner of the political tsunami that would hit Congress two years later, and the 2006 governor’s race.

His work has appeared in The Washington Post, The Boston Globe, The Dallas Morning News and dozens of other publications. Frates has covered three statehouses and numerous campaigns.

His political analysis has been featured on the CBS Evening News, CNN, Fox News, MSNBC, WTOP and many other national and local television and radio programs.

Of all the important people he has interviewed, Frates still counts Mister Rogers among his favorites.